Judge orders Obamacare insurers in Louisiana to accept HIV funds

CHICAGO (Reuters) - A U.S. district court judge in Louisiana has
temporarily barred Blue Cross and Blue Shield of Louisiana and
two smaller insurers from rejecting payments from a federal
program intended to help low-income HIV patients buy health
insurance.

The insurers named in the case are Blue Cross and Blue Shield of
Louisiana, Vantage Health Plan and Louisiana Health Cooperative.
They are among a small handful of insurance companies in
Louisiana that sell healthcare policies under President Barack
Obama's healthcare law.

Blue Cross and Blue Shield of Louisiana, the state's largest
insurer, said late last year that it would no longer accept
federal Ryan White payments on behalf of individuals with human
immunodeficiency virus, which causes Acquired Immune Deficiency
Syndrome. Subsequently, the two smaller insurers followed suit.

Brian Jackson, chief judge of the U.S. District Court for the
Middle District of Louisiana, on Monday issued a temporary
restraining order that compels the three insurance companies to
continue to accept federal Ryan White funds to pay insurance
premiums on behalf of low-income individuals with HIV who bought
one of the companies' plans on the federal health insurance
exchanges.

The order expires in 14 days, but Jackson has scheduled a hearing
for later on Tuesday to consider a preliminary injunction in the
matter. If granted, the preliminary injunction would supplant the
temporary restraining order, and would maintain insurance
coverage for low-income Louisianans living with HIV.

"We are moving ahead in court to address the legalities of having
them pull the rug out from under low-income people with
HIV/AIDS," said Susan Sommer, director of constitutional
litigation for Lambda Legal, which brought the lawsuit on behalf
of John East, a plaintiff living with HIV.

For more than two decades, low-income individuals with HIV have
used funds from the federal Ryan White HIV/AIDS Program to buy
health insurance.

Late last year, Blue Cross and Blue Shield of Louisiana began
rejecting Ryan White payments sent on behalf of impoverished
HIV-AIDS patients who had enrolled in one of its Obamacare plans,
as did Blue Cross Blue Shield of North Dakota.

The insurers told healthcare advocates that guidance issued by
the Centers for Medicare and Medicaid Services, the lead
Obamacare agency, prevented them from accepting third-party
payments for the new health plans, even when the funds came from
a government program.

Earlier this month, the CMS said that guidance did not apply to
the Ryan White program. The federal agency also said that it is
considering amending rules to require issuers to accept Ryan
White payments.

Louisiana Blue, nevertheless, said it will stop honoring Ryan
White and other third-party payments for premiums beginning March
1, a policy it said will "safeguard against" potential fraudulent
activity from "people who want to game the system."

A spokesman for Blue Cross did not respond to a request for
comment on the ruling.

Sommer said Lambda Legal is seeking to proceed as a class action
on behalf of all affected people.

In his ruling, Jackson cited the grave risk and potential
"irreparable injury" that would befall individuals with HIV who
are unable to obtain insurance.

(Reporting by Julie Steenhuysen in Chicago; Additional reporting
by Sharon Begley in New York; Editing by Jan Paschal)

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